At least 26-Nation Tripartite Free Trade Area Set to Replace 3 East African Trading Blocs, Promising a New Era of Trade. Photo: The Habari Network
COMESA-EAC-SADC Free Trade Area Launch: Tanzania’s Hopeful Yet Cautious New Trade Era Begins
By Adonis Byemelwa
Dar es Salaam—The business community in Tanzania is expressing mixed feelings as the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement officially comes into force on Thursday, July 25, 2024. The East African Community (EAC) headquarters in Arusha confirmed on Tuesday that the agreement, which aims to create one of the largest free trade areas in Africa, has met the required threshold for implementation.
The agreement’s activation follows the Republic of Angola’s submission of its Instrument of Ratification on June 25, 2024, marking the 14th member state to do so—a crucial number needed for the agreement to take effect.
The announcement was made during the 37th Tripartite Task Force Meeting, held on July 20, alongside the 6th African Union Mid-Year Coordination Meeting in Accra, Ghana. The meeting was attended by key leaders, including Mr. Elias Mpedi Magosi, Executive Secretary of the Southern African Development Community (SADC) and Chairperson of the Tripartite Task Force, and Mr. Chileshe Mpundu Kapwepwe, Secretary General of the Common Market for Eastern and Southern Africa (COMESA).
To date, the 14 countries that have ratified the agreement, including Angola, Botswana, Burundi, Egypt, Eswatini, Kenya, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda, Zambia, and Zimbabwe, collectively represent 75 percent of the Tripartite GDP as of 2022.
Despite these developments, Tanzania has not yet ratified the TFTA. Analysts and business community members in the country express a mix of optimism and caution. Prof. Damian Gabagambi, former Executive Director of the National Development Corporation (NDC), highlighted the benefits of regional blocs in expanding market access but cautioned that without equitable trade policies, smaller economies might be overshadowed by larger ones.
“Tanzania may be taking a cautious approach, assessing the conditions before opening all doors at once,” he noted, emphasizing the need for a step-by-step integration process.
Mr. Akida Mnyenyelwa, Director of Policy and Advocacy at the Confederation of Tanzania Industries (CTI), stressed the necessity for Tanzania to bolster its infrastructure—particularly roads, railways, and electricity—to fully capitalize on the TFTA’s opportunities. “Without adequate infrastructure, local industries may struggle to compete in these expanded markets,” he warned.
In a broader context, the TFTA aims to enhance market access, streamline trade regulations, and harmonize policies among the 29 member states, which encompass 53 percent of the African Union’s membership and over 60 percent of the continent’s GDP. The framework focuses on three pillars: Market Integration, Infrastructure Development, and Industrial Development.
However, EAC Secretary-General Veronica Nduva highlighted that despite these integration milestones, intra-EAC trade remains low, constituting only 15 percent of the region’s total trade in 2022.
She pointed to the persistent issue of non-tariff barriers (NTBs) imposed by partner states as a significant impediment. “Efforts are being made to resolve existing NTBs and discourage the imposition of new ones in line with the EAC Customs Union Protocol,” Nduva stated, emphasizing the commitment to increasing intra-EAC trade.
According to recent data, EAC imports from the United Arab Emirates surged by 81.9 percent to $8.01 billion in 2022, while imports from India grew by 20.9 percent to $5.85 billion. Imports from China and the United States also saw significant increases.
Despite the region’s growing trade with global partners, intra-EAC trade saw a modest increase of 11.2 percent to $10.91 billion in 2022, indicating the need for further integration efforts.
The EAC is also expanding its membership, with Somalia being admitted as the newest member last December. This expansion brings both opportunities and challenges, as new members integrate into the community’s economic and regulatory framework.
The implementation of the COMESA-EAC-SADC TFTA marks a significant step towards deeper economic integration in Africa. However, the journey ahead will require concerted efforts to address the challenges and leverage the opportunities presented by this ambitious agreement. As Tanzania contemplates its position, the outcomes of this trade bloc will likely influence its decision-making process shortly.
